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July 2014 U.S.A. $5.95

ALSO IN THIS ISSUE

President Obama Honors Worcester Tech Grads ADALB Advisory Ruling: The Industry Speaks www.grecopublishing.com

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New England Automotive Report

July 2014 • Volume 12, No. 7

CONTENTS

DEPARTMENTS PRESIDENT’S MESSAGE 7 | Time for Action at the ADALB

by Paul Hendricks IN THE AREA 10 | AASP/MA Shop Hosts Child Passenger Safety Seat Checkpoint

LEGAL PERSPECTIVE 16 | Personal Inspection

by James A. Castleman, Esq. NATIONAL NEWS 26 | Shops’ Legal Options Explored at Illinois Symposium 51 | Montanez Offers Airbag Testimony at RI Senate Hearing

36 LOCAL NEWS 43 | Putnam VOC Hosts Advisory Committee Appreciation Dinner MARK MY WORDS 54 | Credit Cards and Your Bottom Line

by Mark Giammalvo

FEATURES 22 | The ADALB’s “Video or Digital” Advisory Ruling: The Industry’s Response 28 | From Washington to Worcester: President Obama Honors MA Vocational Students 36 | 2014 AASP/MA Golf Outing Highlights

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46 | Rejuvenating the Regions: An AASP/MA Chapter Meeting Recap

ALSO THIS ISSUE 8 | A MESSAGE FROM THE EXECUTIVE DIRECTOR 13 | AASP/MA MIDSTATE CHAPTER BBQ NOTICE 18 | AASP/MA ANNUAL CASINO NIGHT NOTICE

19 | AASP/MA SUSTAINING SPONSORS 61 | AASP/MA MEMBERSHIP APPLICATION 62 | INDEX OF ADVERTISERS

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PRESIDENT’S MESSAGE

Time for action at the adalB For as long as I can remember, there has always been some sort of controversy at the Auto Damage Appraiser Licensing Board (ADALB). You have no doubt read time and time again in the pages of this magazine and elsewhere about complaints from the auto body industry that have been tabled or rejected, as well as rulings made by the Board that have left collision repairers scratching their heads. The recent May 20 advisory ruling regarding digital imaging in appraisals is a perfect example of what I’m talking about. There are presently two collision repair industry representatives sitting on the ADALB. These two shop owners know all too well the ramifications of opening the door to allow digital imagery into the appraisal process. So how did a ruling like this happen? And why isn’t the collision repair industry being represented at the ADALB? As an association representing body shops all over the Commonwealth, we are tired of being undermined by an entity allegedly in place to help streamline the repair process. Instead of working for the auto body industry, the ADALB has instead stifled the voice of the collision repairer through ignoring our complaints, postponing hearing them or voting against our best interests.

If a body shop owner takes the morning off, for example, and travels for several hours to attend an ADALB meeting only to be ushered out 10 minutes in so the Board can adjourn to Executive Session...the efficacy of that Board should be called into question. We aim to do just that.

Rest assured that as we move forward, we will be working closely with the ADALB members to ensure that our needs are being met, and that we are being represented properly. The ADALB should be working to help improve the auto body industry. As of this writing, that is most certainly not happening.

Stay tuned to future issues of New England Automotive Report for updates on our progress with the ADALB. In the meantime, this month’s issue features a ton of industry reactions and opinions regarding the May 20 decision. (See pages 8, 16 and 22.)

And as a final note, if you haven’t seen video coverage of the May 20 and June 11 ADALB meetings, I highly suggest you visit the Members Only section of the AASP/MA website. It’s a very interesting watch.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

AASP/MA President Paul Hendricks is the owner of Hendricks Auto Body in Uxbridge, MA. He can be reached at (508) 278-6066.

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www.grecopublishing.com New England Automotive Report is published monthly by TGP, Inc., 244 Chestnut Street, Suite 202 Nutley, NJ 07110. Distributed free to qualified recipients; $48 to all others. Additional copies of New England Automotive Report are available at $5 per copy. Reproduction of any portions of this publication is specifically prohibited without written permission of the publisher. The opinions and ideas appearing in this magazine are not necessarily representations of TGP Inc. or of AASP/MA. Copyright © 2014 by Thomas Greco Publishing, Inc. Images: Cover, pg. 5 ©www.thinkstockphoto.com/Justin Skinner; pg.

5, pg. 22 ©www.thinkstock.com/Jose David Rey Macias; pg. 13 ©www.thinkstockphoto.com/saiva; pg. 18 ©www.thinkstockphoto.com/Kalawin; ; pg. 54 ©www.thinkstockphoto.com/George Doyle.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

AASP/MA EXECUTIVE COMMITTEE PRESIDENT Paul Hendricks VICE PRESIDENT Molly Brodeur SECRETARY Gary Cloutier ACTING TREASURER Molly Brodeur IMMEDIATE PAST PRESIDENT Rick Starbard

AASP/MA STATEWIDE DIRECTORS COLLISION DIVISION DIRECTOR Adam Ioakim ASSOCIATE DIVISION DIRECTOR Don Cushing

AASP/MA CHAPTER DIRECTORS N/E CHAPTER COLLISION DIRECTOR Alex Falzone S/E CHAPTER COLLISION DIRECTOR Kevin Gallerani S/E CHAPTER MECHANICAL DIRECTOR Michael Penacho MIDSTATE CHAPTER COLLISION DIRECTOR Tom Ricci WESTERN CHAPTER COLLISION DIRECTOR Peter Langone WESTERN CHAPTER MECHANICAL DIRECTOR Ed Nalewanski

AASP/MA EXECUTIVE DIRECTOR Jillian M. Zywien Lynch Associates, Inc. 10 Liberty Square, 5th Floor • Boston, MA 02109 phone: (617) 574-0741 Fax: (617) 695-0173 Email: jzywien@aaspma.org

WWW.AASPMA.ORG New England Automotive Report

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A MESSAGE FROM THE EXECUTIVE DIRECTOR

adalB Meetings yield advisory ruling on digital images in appraisals, Conflict of interest verbiage AASP/MA’s Legislative Committee and staff have been working tirelessly over the past three months on a number of regulatory items relative to the Auto Damage Appraiser Licensing Board (ADALB). The

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ADALB met on May 20 for a little over two hours, with Tom McClements the only Board Member not in attendance. Following the approval of the last meeting’s minutes, the Board discussed the next Part II

New England Automotive Report

exam set for June 17. The board briefly discussed receiving a letter from an individual whose prior test results had been overturned. Carl Garcia said he would review the letter and reach out to the individual, and based on their discussion, offer a retake of the test.

Next on the agenda was the advisory ruling Dave Krupa and Garcia were charged with drafting relative to personal inspections being done by photo and/or video. Following the presentation of the draft language, a discussion occurred regarding the purpose of this advisory ruling. The Board agreed it was a short-term change for clarification and they would still be interested in making changes to the Personal Inspection section in CMR 212. Additionally, ADALB member Joe Coyne suggested the word “quality video” be added before “digital images” in order to “protect the consumer.” AASP/MA’s concern, which we raised before the Board, was in defining the word “quality.” It was the opinion of the Board that this definition would be left up to interpretation. The full language of the advisory ruling can be found online at www.mass.gov/ocabr/docs/doi/mvda/mv da-advruling-2014-01.pdf. For further discussion on the ramifications of this advisory ruling, please see page 16 and page 22 of this issue.

Following the approval of the advisory ruling, there was a lengthy discussion on the process of addressing changes to the regulations, which Board counsel Michael Powers outlined for the Board.

The Board agreed that they would need to hold at least one more meeting to discuss and review all their proposed changes to the regulations, and indicated that they would be willing to hear from interested parties at their next meeting on proposed changes. They suggested they would be prepared in August or September to hold a full public listening session.

The Board recognized a member of the audience, Joe Cura (not listed on the agenda), on his request for approval of a company name change. Cura teaches an appraisal course and assured the Board the curriculum would not change, just his company name. Coyne recused himself, as he and Cura do business together.

The last item on the agenda were four complaints presented aaSp/Ma’s concern on the adalB’s ruling to the Board by DOI counsel. Chairman Cox suggested he had approving “quality photo and/or video” for no issue with discussing the complaints publicly; Krupa, however, said their previous procedure was to review the claim ini- appraisals was in defining the word “quality.” tially in executive session. Counsel Powers mentioned that it was the opinion of the Board that this Coyne must excuse himself from the first claim, as it relates to his company. The Board then adjourned into Executive session definition would be left up to interpretation. at 10:22am.

The next meeting of the ADALB took place on Wednesday, June 11. Following the approval of the minutes, McClements Before the close of the meeting, AASP/MA asked to be apologized for missing last month’s Board meeting and noted recognized by the Board relative to the issues being brought to that the Board’s vote on the Advisory Ruling was unanimous the future listening session. Our concern was that three of the for those present at last month’s meeting. items previously agreed to be discussed at the public listening Next, the Board took up the issue McClements addressed session were removed from the Board’s agenda. AASP/MA adon April 29 relative to “appraisals” versus “estimates.” In Mc- vocated strongly to have these items back on the public listening Clements’ opinion, the body shop appraiser is the individual session agenda, and were successful in doing so.* who knows the damage the best. Garcia restated that point, by Before adjourning, the Board scheduled their next meeting saying he writes appraisals rather than estimates in his shop. for Wednesday, August 6 at 9:30am.

Krupa asserted that if a licensed appraiser at the shop writes an Members, I cannot stress enough how important it is to appraisal, it is considered an appraisal. The word “estimate” is watch the video coverage of these meetings and participate in used to circumvent the conflict of interest clause. Chairman Cox these conversations. Thank you to the AASP/MA Board memcautioned against removing the conflict of interest language, as bers who were able to attend these important meetings. We apit would encourage steering. Krupa agreed with that statement preciate your time and support. and added further that, if you are a DiOver the last couple of months, the rect Repair shop writing an appraisal for association has been working closely the consumer, you’re also writing on bewith the Commonwealth Automobile AASP/MA Executive Director half of the insurance company; that is a Reinsurers (CAR), who has agreed to an Jillian Zywien has been a direct conflict. Consumer protection is of interim change of their Performance senior account executive at utmost importance, he said, and steering Standards on some language changes.

Lynch Associates for over six is happening every day. Chairman Cox The language we were able to agree on years. She can be reached at countered with the question of how the would eliminate what some appraisers (617) 574-0741 or via email at Board would know steering was an jzywien@aaspma.org. use to suppress the Labor Rate. We have issue without complaints. Krupa furone more step in the Committee process thered that the quality of repairs is being before final approval from the Division affected if you send consumers to a of Insurance, and we look forward to presenting the final aphandful of DRP shops. Following this discussion, the Board ul- proval to our members in the very near future. Please look to timately decided to place this item on the agenda for their pub- your newsletter, future issues of New England Automotive Report lic listening session, which they have asserted will be scheduled and the AASP/MA website for this exciting change. sometime in September. The Board asked Counsel Powers for Luckily, the rain held out for AASP/MA’s recent Golf Outlanguage on the conflict of interest clause and some input from ing on Thursday, June 12 and a great time was had by all! Thank the Commissioner on this issue. you to all of our sponsors and members who made this year’s The much-discussed issue of raising the threshold of ap- golf outing a success. Our deepest appreciation to Andrea Kerpraisals from $1,500 to $4,000 was next on the Board’s agenda. shaw and Greg Rusnak of Enterprise Rent-A-Car, our TournaChairman Cox asserted that the Board was in consensus on in- ment Sponsor, who made this amazing event possible. For full creasing the number. Several Board members raised concern coverage of this year’s Golf Outing, please turn to page 36. with increasing the amount, including Coyne, McClements and Garcia. Following a brief discussion, it was clear three out of the four Board members would not seek an increase and would like Sincerely, the amount to remain the same. The Chairman added this item to the listening session agenda.

There were four complaints before the Board; three were dismissed following last month’s meeting and were reported as such at the June meeting. The fourth complaint, which was filed

by AASP/MA, did not receive a full vote of the Board because Jillian Zywien of McClements’ May 20 absence. AASP/MA advocated for the AASP/MA Executive Director complaint to be addressed during the public portion of the meeting; however, the Board agreed to reconvene on this issue in Executive session. *To view video of the May 20 and June 11 ADALB meetings, please visit the Members Only section of the AASP/MA website at www.aaspma.org.

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IN THE AREA

aaSp/Ma Shop hosts Child passenger Safety Seat Checkpoint

Photos, clockwise from left: Hopkinton Patrolman Stephen Buckley inspects a child safety seat; Body & Paint Center owner Tom Ricci; Hudson Patrolman Wendy Durkin joins area resident Kim Medeiros and Medeiros' children Marlyana (left) and Nathan during Body & Paint Center's Child Passenger Safety Seat Checkpoint. Photos courtesy of Body & Paint Center.

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New England Automotive Report

On May 10, AASP/MA member shop Body & Paint Center (Hudson) opened their doors for a very special event to promote the safety of young ones in their community. During a special Child Passenger Safety Seat Checkpoint held by the business in conjunction with the Hudson Police Department and the Massachusetts Child Passenger Safety Program, vehicle owners were invited to visit the shop and have their booster and child car seats inspected by state-certified technicians. In cases where the seats were expired or no longer fit, drivers were provided with new ones free of charge to better ensure passenger safety. These seats were provided through a grant by the Executive Office of Public Safety and Security’s Highway Safety Division. The special event attracted participation from members of the Hudson Police Department, Hopkinton Police Department, Leominster Auxiliary Police and Westminster

Police Department. Dozens of drivers from Hudson, Worcester, Maynard, Clinton and Newburyport took advantage of the Checkpoint.

After seeing a similar Child Passenger Safety Seat Checkpoint held in the area, Body & Paint Center owner Tom Ricci contacted the Hudson Police to inquire about setting up an event at his business. The shop’s large indoor area allowed for a number of cars to be brought in from the rain and be inspected. Ricci was amazed by the great response from area vehicle owners.

“It just felt like the right thing to do,” he says. “We wanted to use our facility to do something to help the drivers in our area. What better way to do that than by promoting safety for the children in the cars on our roads? People were just floored by the event, especially those who received a new seat.”

Wendy Durkin, a Hudson Police patrolman and certified car seat technician, attended the event and was equally impressed by the enthusiasm shown throughout the community.

“It was very successful for the amount of people we had and how many seats we actually gave away,” she says. “Rather than just putting the car seats in, we had the parents learn how to do it.”

While drivers had their car seats checked out, their children were entertained in a special waiting area at the shop complete with free coloring books printed up by Body & Paint Center that offered valuable information on bucking up and other car safety tips for kids.

A Hudson automotive repair institution since 1979, Body & Paint Center has been at its present location on Main Street since 1996. More information on the business is available at http://bodyandpaintcenter.com.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

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LEGAL PERSPECTIVE

perSonal inSpeCTion

by James A. Castleman, Esq. The Auto Damage Appraiser Licensing Board issued an Advisory Ruling on May 20, 2014 that may significantly change the way auto damage appraisals in Massachusetts will now be written.

For more than 30 years, the ADALB’s regulation has required that when writing an appraisal, “[t]he appraiser shall personally inspect the damaged motor vehicle and shall rely primarily on that personal inspection in making the appraisal.” After seemingly making it clear that “personal inspection” means actually being in the physical presence of the vehicle, the regulation continues: “As part of the inspection, the appraiser shall alSo photograph each of the damaged areas.” (Emphasis added.) Yet, the ADALB decided on May 20 that it will now interpret its regulation so that “an appraisal conducted by a licensed appraiser via review of quality video or digital images with documentation meets the requirements” for “personal inspection.”

Where did such an interpretation come from? Does it make sense? Does the ADALB even have the authority to make such an interpretation? And will this be good for the collision repair industry in Massachusetts?

Where did it come from?

I suppose the idea that digital images could substitute for in-person visual inspection is probably a concept that has become gradually accepted over the past several decades. When the ADALB regulations were first issued in 1981, there were no devices (at least not affordable ones) that could capture digital images of any kind, never mind quality images. Back then, “state of the art” referred to a Polaroid camera that could produce grainy images on messy, chemically-treated paper - after about a minute of waiting for things to magically appear. Vehicle colors in the pictures were only vaguely similar to the actual paint on the car, and only major damage could be confirmed. It was often impossible to tell the difference between a scratch on the car and a scratch on the photo paper the picture was printed on.

Once taken, the only way to transmit these pictures to another location was to put them in the mail through the US Postal Service or to hand deliver them. In 1981, fax machines had not yet become prevalent (not that a fax would provide a good image even today), and no one had heard of the Internet or email.

Today, however, the least expensive of cell phones can capture highly accurate quality images, showing the minutest of damage in accurate color and incredible detail. For a few dollars more, a camera or advanced cell phone can be purchased that reproduces images with precision that would have 16 July 2014

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required unthinkably expensive and extraordinarily sensitive professional equipment back in the ’80’s. Ten-year-old kids are walking around today with cell phones in their pockets that give them the ability to take pictures that only professional photographers used to be able to create. And nowadays, the digital images can be instantaneously transmitted to almost any location in the world.

What really prompted the ADALB to act, however, was probably the Massachusetts Division of Insurance’s approval of a MetLife Direct Payment Plan a couple years ago, which specifically provided that MetLife’s in-house appraisers could rely on electronically transmitted digital photos taken by their referral repair shops to assess damage. While the Division’s approval of MetLife’s Plan seems to have occurred minus prior consultation with the ADALB, once the Plan was approved, the Division appeared to push the ADALB to accept the concept. And the ADALB chose not to challenge MetLife or the Division on the concept.

Once the ADALB accepted the MetLife procedure, it wasn’t much of a stretch for the Board to extend it to all appraisers and all insurers. In fact, perhaps it was the only fair thing to do.

Can the ADALB Do This?

Under the ADALB’s governing statute, the Board is specifically given the authority to issue regulations. And under generally accepted legal principles, agencies are given the right to interpret their own regulations. Further, a section of the Massachusetts Administrative Procedures Act gives government agencies the right to issue “advisory rulings” that interpret their regulations: “On request of any interested person, an agency may make an advisory ruling with respect to the applicability to any person, property or state of facts of any statute or regulation enforced or administered by that agency.”

The issuance of advisory rulings does not require the same procedural safeguards that issuance of regulations does.

No hearings have to be held, no input has to be sought and no particular procedures have to be followed.

On the other hand, unlike regulations, advisory rulings do not carry the “full force and effect” of law. In other words, while advisory rulings give guidance as to how an administrative agency would act if faced with a certain set of facts, they are only opinions and do not necessarily have to be followed by the agency when faced with a real life dispute that it must rule on.

Additionally, case law holds that advisory rulings cannot contradict the requirements of a statute or an existing regulation. Statutes are the law of the state, enacted by the legislature

and agency regulations cannot violate them. And once an agency issues a regulation, it’s stuck with what the regulation says. The agency cannot alter it without holding hearings and amending or repealing the existing regulation. An advisory ruling cannot change an existing regulation; it can only interpret it.

On its face, it may appear that the recent ADALB advisory ruling may, in fact, violate its existing regulation. After all, doesn’t “personal inspection” mean actual, in person physical inspection? Perhaps it does, based on the reality that the ADALB chose to specifically distinguish photographs from “personal inspection” when it first wrote its regulation.

Additionally, the ADALB’s governing statute itself distinguishes between personal inspection and photographs in determining whether an insurer legally may be allowed to obtain competitive damage estimates from a second repair shop. A competitive estimate cannot be obtained unless “a licensed appraiser has inspected the vehicle and prepared an itemized estimate of repairs to be performed. No such competitive estimates shall be obtained by the use of photographs, telephone calls or in any manner other than a personal inspection.”

It is quite possible that, if challenged, a court could determine the ADALB’s advisory ruling to be an invalid interpreta-

vehicle owners to suffer because of inaccurate appraisals and failure of accountability?

If done properly, however, perhaps utilization of digital images with proper documentation will help repair shops by reducing cycle time for vehicle repairs, since the insurance appraiser will not have to spend the time to physically come to the shop to view the vehicle, either for an initial or for a supplemental appraisal. Though the advisory ruling is new, the concept had previously been at least partially accepted for the purposes of expedited supplemental appraisals - a procedure officially incorporated into the regulation itself after hearings were held and other procedural safeguards were met. Further, it is my understanding from shops that use expedited appraisals that the expedited appraisal experience can be a very positive one.

What seems clearer is that the ADALB’s advisory ruling will likely have a negative impact on independent appraisers.

After all, if insurers can keep their staff appraisers in their offices, examining digital images that shops are uploading to their desktop computers, it would seem that staff appraisers could handle a lot more volume, meaning that there would be much less of a need for independents. Will it mean the end of the independent appraisal industry? It will be worth watching to see what happens.

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on its face, it may appear that the recent adalB advisory ruling may, in fact, violate its existing regulation.

tion of its regulation. Yet, courts do give deference to an agency’s interpretation of its own regulation, so such a challenge would not be guaranteed to succeed. At the same time, the ADALB has given its approval to acceptance of digital images instead of in-person viewing, so it would seem fruitless to challenge the procedure at the ADALB itself. It would seem likely that appraisers who do utilize the procedure would be protected from being punished for doing so.

Even further, the ADALB is currently considering amending its existing regulation in several respects, anyway. If it does so, then it probably can include changes that incorporate the concept of the advisory ruling, and it would be likely that such a change would be valid.

Is it good for the collision repair industry?

I’m not sure that I know the answer to this question.

Perhaps utilization of digital images for remote appraisals will be abused in certain circumstances, allowing for unscrupulous repair shops and insurance appraisers to falsify damage and alter what would have been on an in person appraisal. Further, it may make it more difficult to negotiate with an insurance appraiser in a meaningful way, since the appraiser is not at the repair shop and does not have to negotiate with the shop appraiser face to face. Additionally, will it cause

”

Conclusion Whether you like it or not, it appears the day has come when insurance appraisers will no longer have to physically go to collision repair shops in order to prepare appraisals of damaged vehicles. It’s a new concept, and it may take a while to iron out the wrinkles and make it work right.

But if you are in the auto body repair business in Massachusetts, you should prepare yourself for the new world of appraisals based on electronically transmitted digital images. If you like the concept - and the idea that it might save you cycle time - maybe you want to consider asking all insurers to write their appraisals from digitally transmitted images, since the process can no longer be seen as unique to only one insurer and its hand-picked subset of referral shops.

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

Attorney James Castleman is a managing member of Paster, Rice & Castleman, LLC in Quincy, MA. He can be reached at (617) 472-3424 or at

jcastleman@prclawoffice.com.

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FEATURE

The adalB’s “video or digital” advisory ruling:

The induSTry’S reSponSe As Told to Joel Gausten

As discussed in this month’s Legal Perspective on page 16 and Executive Director’s Message on page 8, the Massachusetts Auto Damage Appraiser Licensing Board (ADALB) issued an advisory ruling on May 20 stating that an appraisal conducted by a licensed appraiser via review of “quality video or digital images” with documentation meets the requirements of 212 CMR 2.04(1)(d), which states that “the appraiser shall personally inspect the damaged motor vehicle and shall rely primarily on that personal inspection in making that appraisal...” Not surprisingly, the advisory ruling has sent shockwaves throughout the Commonwealth’s collision repair community. new england automotive report reached out to AASP/MA members for some of their immediate thoughts on the ADALB’s decision.

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adaM ioakiM

JuSTin Forkuo

(hendricks auto Body, uxbridge, Ma) We knew it was coming; we just have to make it work for us. It’s too vague the way it is written now. You’re trying to tell me that anybody can just take photos, send them in to the insurance company and they’re going to write an estimate?

What happens if there is a safety issue involved in this? What happens if the customer takes the picture, not realizing that the front end of the car is out of whack?

The law clearly states that if a vehicle, upon inspection by a licensed appraiser, would not pass a safety or emissions inspection, we are to remove the sticker.

How is that going to be implemented if there’s no physical inspection of that vehicle by an appraiser? I think the clarification should be that a licensed appraiser should view the vehicle, and if an estimate is written in-house, it’s obviously written by a licensed appraiser as well.

From Day One when I got my appraiser’s license, it was always stated that you would not appraise a car with a photo. If I put two cars side by side and take a picture, the reflection of the other car bounces into the photos. You can’t imagine what that could be made to look like. I think there’s a lot of extra room for fraud. In addition to that, I still feel that those ADALB meetings should be moved to a location that’s convenient to all.

(hogan & van auto Body, Medford, Ma) We do need to keep up with technology and the times. With that said, I don’t think the advisory ruling as written benefits the consumer or the body shop. I really feel that it only benefits the insurance company. It’s a cost-saving technique for them that really does an injustice for the consumer. There is no way to accurately appraise damage via pictures or video. It leaves out too many items that wouldn’t show up in a camera or video. You wouldn’t be able to feel the damage, or the dent or the scratch to see the extent of what happened, nor would you be able to see other items on the vehicle that would be indicators of further damage. It completely takes away the ability to access the damage from a safety standpoint for the customer.

(290 auto Body, worcester, Ma) Insurance companies are going to do what they want to do; they’ve been doing it for years. I’ve been following the ADALB meetings, but not as closely as I’m reading the 1963 Consent Decree, which I believe is much stronger. Whether you choose to accept the photography [ruling] or not, it’s all a piece of an already-broken law. It’s all part of the cost-control process of Direct Repair. You don’t have to be welleducated to know that.

If they’re going to pay us off of photos, then we don’t need appraisers anymore. I have some of the highest-quality cameras that you can get, so we don’t need any more appraisers in the facility. Are they just going to pay, or are they just going to take the pictures and then someone in an office is going to dissect them and look for money that they can take away from the body shop? It’s absurd for someone to say they can do an estimate off of photos alone. I have a problem with them paying me for the repairs I need right now, and they stand right in front of my face! Imagine when they get photos.

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I think the ADALB truly thinks they are keeping up with the times, but I don’t think they thought it through to the point of how it affects the customers, their safety and the ability to write an accurate appraisal.

New England Automotive Report

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riCk STarBard (rick’s auto Collision, revere, Ma) I think you need that other set of eyes on the car. Through enhancements, whether it’s physical things or software, you can make a picture say as much or as little as you want. I don’t agree with the ruling, and I don’t agree with this “consumer picture” thing, either. In one respect, it begins a claim, but as far as generating an appraisal and a check off of a consumer’s cell phone picture and making them think that their claim is now settled? That is crazy.

With cars as complex as they are, and the amount of hidden damage in an accident, they think that Joe Blow with an iPhone can snap a shot and settle their claim? I think they should come out and see the car.

What’s going to happen with personal injury cases? Somebody took a shot, and maybe the shop doesn’t want to see the car totaled because they need the work, so they don’t write all the damage behind the bumper. Then somebody has a personal injury suit involved with that accident, and the insurance company says, ‘No, your injury damages can’t be that because the damage to the car was only this. We have the picture.’ There’s a host of reasons why this shouldn’t be used. It’s not used for consumer convenience; it’s for insurer control. Another issue with customer photos is that we have a law requiring removal of inspection stickers. If a customer sends in a photo with safety violations, who is pulling the sticker?

With its new, ergonomically shaped handle, the spray gun is perfectly balanced. All controls can be easily operated even when wearing gloves. The spray gun is sturdy and long-lasting.

Enhanced durability

The spray gun body is equipped with a corrosion-resistant chrome surface. The sturdy air cap is made of chrome-plated brass; the paint needle and fluid tip are made of tempered stainless steel. The trigger protects the paint needle from overspray during painting, thus prolonging the lifetime of the paint needle sealing. The air piston rod has been especially reinforced.

Large QCC cup connection

The SATAminijet 4400 B allows the use of all three RPS cup sizes with no adapter necessary. The large cup connection makes the cleaning of the material passages extremely easy.

Performance

new england automotive report will provide updates on the ADALB’s advisory ruling and its implications for the collision repair industry in future issues. Please stay tuned; this story is only beginning.

The SATAminijet 4400 B has a quiet, soft fan, with high working speed and fine atomization. The fan is larger than former SATAminijet models, and the SR nozzle sets provide a wide, evenly shaped fan perfect for spot repairs, blends and small panels.

Dan-Am Company is the exclusive independent distributor of SATA products in the US and Puerto Rico.

To learn more about SATA, visit www.satausa.com. *RP version pending SCAQMD and EPA approval.

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NATIONAL NEWS

Shops’ legal options explored at illinois Symposium On May 30 and 31, repair professionals from around the country gathered at the Renaissance Schaumburg Hotel and Convention Center in Schaumburg, IL for legal perspectives on some of the industry’s biggest issues. During the two-day educational symposium (“S.A.F.E. Cars - Safe Automobiles for Everyone”) hosted by the Alliance of Automotive Service Providers of Illinois (AASPI) and open only to collision repairers and industry vendors, attendees were treated to workshops and guest presentations from lawyers and shop own-

Former Utah Attorney General Mark Shurtleff addressed attendees of the S.A.F.E. Cars Symposium.

ers knowledgeable in how to use the legal system to address common industry issues. Presenters included Mississippi attorney John Eaves, Jr., Bill Byrne (AASPI) and Florida shop owner Ray Gunder (Gunder’s Auto Center, Lakeland). The event also drew participation from Mississippi Attorney General Jim Hood, Louisiana Assistant Attorney General Stacie DeBlieux and three-time Utah Attorney General Mark Shurtleff.

AASP/MA member Rob DelGallo, owner of Factory Collision in Weymouth, took time out of his shop’s busy schedule to attend the Symposium and was greatly impressed by what the event had to offer.

“It was enlightening because there were hundreds of shops there in the same room as lawyers and Attorneys General,” he says. “They were all in tune with the Consent Decree of 1963.”

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DelGallo notes that several attendees were former Direct Repair shops that made the decision to operate as strictly independent businesses.

“They’re seeing more profitability per job, and that just reinforced my thought process that if I’m working for the customer, I can actually realize more profit per job by doing the repair correctly and getting paid for all the procedures,” he offers. “More and more shops nationally are getting off the programs because they’ve been drinking the Kool-Aid for so long that they’re finally getting a bad taste in their mouths. They’ve seen the light.

Why do they want to put the customer at risk by doing inferior repairs under the premise of the insurance company sending them more work? We all went into business to be independent. How can owners be truly independent with a slave master telling them to do what they know is wrong when they and they alone are liable?”

Fellow AASP/MA member Rick Starbard was encouraged by the outpouring of interest and support offered by the members of the legal profession in attendance.

“It’s about time that attorneys are finally listening to people in this industry and seeing how much the insurers try to dominate our industry through tortious interference, substandard repairs and a failure to pay,” he offers. “The fact that they had the Attorney General from Mississippi, the Assistant Attorney General from Louisiana and the former Attorney General from Utah all saying the same thing blew my mind.”

Montana-based industry representative Janet Chaney (Cave Creek Business Development) was also pleased to have made the trip to the AASPI event.

“I think it was a blockbuster lineup of speakers,” she says. “It was the first conference of its kind to have Attorneys General and the legal profession involved, and it was good information.”

Above all, Starbard feels that the S.A.F.E. Cars event opened the door to greater collaboration between shops and those with the legal expertise to improve conditions for body shops throughout the US. “There is something looming on the horizon that will make things better for this industry,” he says. “Finally, somebody is listening.”

AASP/MA is planning to host a special event with Attorney John Eaves, Jr. later this summer. Look for more information in an upcoming issue of New England Automotive Report.

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Mississippi Attorney General Jim Hood offered insight into how shops could use the legal system to find relief to industry concerns.

Photos courtesy of Janet Chaney

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FEATURE

Photos & Story by Joel Gausten As anyone who reads New England Automotive Report already knows, auto body and mechanical vocational students are the true heroes of this industry. But on June 11, the world was made aware of just how special these hardworking future professionals truly are.

At their graduation ceremony at the DCU Center in Worcester, the Worcester Technical High School’s Class of 2014 were treated to a commencement speech by none other than President Barack Obama. The President appeared to an ecstatic crowd of students, parents, family and friends to congratulate the school on all that it has accomplished in recent years and to send the departing class on their way in a manner they would never forget. And New England Automotive Report was there.

In his address, President Obama offered words of pride and encouragement to the 2014 graduates.

“Over the past four years, some of you have learned how to take apart an engine and put it back together again,” he remarked. “Some of you have learned how to run a restaurant, or build a house, or fix a computer. And all of you are graduating today not just with a great education, but with the skills that will let you start your careers and skills that will make America stronger. Together, you’re an example of what’s possible when we stop just talking about giving young people opportunity, when we don’t just give lip service to helping you compete in the global economy and we actually start doing it.

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why I’m here today. I mean, I like all of you, and I’m glad to be with you, but the thing I really want to do is make sure that what we’ve learned here at this high school we can lift up for the entire nation. I want the nation to learn from Worcester Tech.”

In addition to delivering a rousing speech, President Obama made sure to shake the hand of every student who received a diploma on the stage at the DCU Center that afternoon. He even gave a few hugs along the way. Naturally, the students and family members in attendance weren’t the only ones thrilled by the President’s participation in this year’s festivities.

“It was a really overwhelming experience,” offers Worcester Automotive Collision Department Head Steve Stefanik, who saw 11 students from his class graduate and shake hands with President Obama. “It was great for the kids; this is something they’re going to remember for a long time. It was just great recognition for the school, the administrators, the students and everybody working hard.”

AASP/MA member Justin Forkuo (290 Auto Body, Worcester), who is also part of Worcester Tech’s Advisory Committee, brought his father Peter along to share in the unforgettable experience.

“My dad was amazed,” he says. “It was a surreal experience to go into the DCU Center, sit down and think about the President being there. Then he comes out, and it’s instant smiles from everyone. It’s just exciting!”

Forkuo adds that the spirit of the day - as well as the

overwhelming support shown to the graduates - was stronger than politics.

“Whether you’re on the left, on the right or in the middle, you have to really tuck all those feelings away and understand the magnitude of a situation like this,” he says. “It was really big for the kids, and for the City of Worcester in general.”

Worcester Technical High School is a 2013 Blue Ribbon School led by Dr. Sheila Harrity, a National High School Principal of the Year who was recently recognized by the President at the National Teachers of the Year event on May 1 at the White House.

“When Dr. Harrity took leadership of the school in 2006, it was one of the lowest-performing institutions in the state,” explained the White House in a prepared statement. “But through implementation of reforms that characterize the President’s vision for comprehensive High School Redesign and the principles of the Administration’s Blueprint for Career and Technical Education, Worcester has seen significant success.”

According to White House figures, Worcester Tech’s 10th grade scores on the statewide Massachusetts Comprehensive Assessment System exam have improved significantly over the past seven years: 92 percent of students now score as advanced or proficient in English Language (a 240-percent increase), while 84 percent of students now score as advanced or proficient in mathematics (an increase of 140 percent).

“Worcester Tech is a model of what can happen when a community decides to invest in the success of its young people,” offered the White House. “The President is determined to continue making progress for America’s students by replicating the transformation seen in Worcester in high schools and communities across the country.”

More information on Worcester Technical High School is available at www.techhigh.us.

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Clockwise from facing page, top left: A crowd of thousands attends the 2014 Worcester Technical HighSchool commencement; graduating students receive a commencement speech from none other than President Barack Obama; AASP/MA member Justin Forkuo poses with his father, Peter, following the unforgettable ceremony.

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2014 AASP/MA GOLF OUTING

HIGHLIGHTS 2

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THE PLAYERS:

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1. (l to r): roth wennerstrom (Best Chevrolet), Bob Moran (Best Chevrolet) and Tom ricci (Body & paint Center) 2. (l to r): darlene andrade (wolpert insurance), leonardo rodriguez (lynn Tech), andy ioakim (hogan & van auto Body) and rick Starbard (rick’s auto Collision) 3. (l to r): Jim Zele (Sherwin-williams), Mike Johnson (Sherwin-williams) and david elie (acme Body & paint) 4. (l to r): Steve williams, don Macritchie, Bob donnelly and Jeff williams of Middlesex auto Body 5. Taking a bite out of victory! The First place team from Cape auto Body savors the moment. (l to r): Tom Mayer, Sean Condon, kevin gallerani and lucas rhodes 6. (l to r): Bill Spellane (Spellane auto Body), ken parker (long automotive), Tom Schube (long automotive), dave ovalles (providence auto Body) 36 July 2014

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JUNE 12, 2014 • CHARTER OAK COUNTRY CLUB • HUDSON, MA PHOTOS BY JOEL GAUSTEN

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7. (l to r): Bino dos Santos, Michael dzengeleski, Brian duffy and rich Cote of lkQ 8. derek Brady from the Third place Foresight insurance team 9. (l to r): Mike Furmanick, Shawn Flanders, willie Camacho and Mike ambrosino of Fuller auto Body 10. The Second place team. (l to r): rich Connor (FinishMaster), al Brodeur (al Brodeur’s South Street), Bob Barnes (al Brodeur’s South Street) and dennis Seaver (FinishMaster) 11. (l to r): aaSp/Ma president paul hendricks (hendricks auto Body), ed nalewanski (ed’s auto Body), gary Cloutier (Cloot’s auto Body) and peter langone (langonet auto Body)

12. The team from Tournament Sponsor enterprise rent-a-Car. (l to r): greg rusnak, andrea kershaw, Seth roy and Steve pacios New England Automotive Report

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AASP/MA THANKS ALL THE SPONSORS OF THIS YEAR’S TOURNAMENT!

AASP/MA

Tournament Sponsor: Enterprise Rent-A-Car

GOLF OUTING

HIGHLIGHTS

Hole In One Sponsors: LKQ Keystone, Long Automotive Group

Clockwise from top right: Longest Drive winner Mike Ambrosino (Fuller Auto Body); Closest to the Pin winner Sean Condon (Cape Auto Body); the last place team, taking their defeat in stride; and Alex Falzone (Guy’s Auto Body), whose raffle tickets paid off with a big win!

Raffle Sponsor: Sherwin-Williams Prize Sponsor: Bald Hill Dodge/Chrysler/Jeep/Kia Breakfast Sponsor: Langonet, Inc. Lunch Sponsors: Best Chevrolet, Gonnello SEO Longest Drive Sponsor: Lynch Associates, Inc. Closest to the Pin Sponsor: Quirk Auto Dealers

CONGRATULATIONS TO OUR WINNERS (AND LOSERS) First Place Team (score of 62) Kevin Gallerani, Sean Condon, Lucas Rhodes, Tom Mayer Second Place Team (score of 66) Dennis Seaver, Bob Barnes, Al Brodeur, Rich Connor

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Third Place Team (score of 68) Donald Choi, Derek Brady Last Place Team Ed Nalewanski, Paul Hendricks, Gary Cloutier, Peter Langone

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Hole Sponsors: Admiral Fasteners; Al Brodeur’s South Street; Albert Kemperle, Inc.; BASF; Auto Body Builders, Inc.; Bernardi Auto Group; Body and Paint Center of Hudson; Boutiette’s Auto Body; Cape Auto Body & Service; Colonial Ford-Plymouth; Don Kennett, Inc.; Ed’s Auto Body & Repair, Inc.; FinishMaster; Greco Publishing; Hendricks Auto Body; Hogan and Van Auto Body; Ira Toyota/Scion of Danvers; Jaffarian Automotive Group; Linder’s, Inc.; Marlborough Nissan; McGee Toyota; Mercedes-Benz of Natick; MontagueBrown Co., Inc.; Paster, Rice, & Castleman LLC; PPG Industries; Rainbow Auto Paint & Body Supplies; Tasca Automotive Group; West Springfield Auto Parts, Inc.

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LOCAL NEWS

putnam voc hosts advisory Committee appreciation dinner On May 28, the Automotive Collision Repair Technology Department at the Roger L. Putnam Vocational-Technical Academy in Springfield held their second annual Advisory Committee Appreciation Dinner. The event drew more than 90 students, vendors, educators and Committee members in an effort to foster stronger relationships between tomorrow’s repair professionals and the companies that will employ them. The fun-filled evening included music by DJ Eddie Levy, a slew of special raffle prizes donated by Advisory Board vendors (including a big-screen TV donated by LKQ/Keystone) and BBQ food prepared by AASP/MA members Gary Cloutier (Cloot’s Auto Body, Springfield) and Craig Gridley (Larry’s Auto Body, Ludlow).

Attendees included various Advisory Committee members and representatives from West Springfield Auto Parts, Axalta, I-CAR, 3M, UTI and several area collision repair shops.

The evening event also drew participation from instructors from other vocational schools including Montachusett Regional, Pathfinder Regional and Franklin County Technical.

Putnam Automotive Collision Repair Technology Instructor John Kennedy was pleased to see so many members of the industry take part in this unique event.

“It was something different,” he says. “It gives the members something to talk about. We asked them to invite a friend or colleague from the industry to the next meeting...The common goal is to work towards improving the collision repair industry, and keep working together so that we ensure that the kids will have employment opportunities.”

The Advisory Committee Appreciation Dinner also included a product showcase by representatives from PRIMA Welders and a special presentation on “the Career Path to Success,” a special team-building initiative that encourages students to work together to develop problem-solving, critical thinking and leadership skills that they will utilize in employment and lifelong learning.

More information on the Roger L. Putnam VocationalTechnical Academy is available at www.putnamacademy.com.

Students and industry members gathered for Putnam Vocational Technical Academy’s Advisory Committee Appreciation Dinner on May 28. Photos

by John Kennedy and Ray Lapite.

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FEATURE

rejuvenating the regions: an aaSp/Ma Chapter Meeting recap

By Joel Gausten

These are very busy times for aaSp/Ma.

In addition to recently hosting the AASP/MA Golf Outing on June 12 (see page 36), the association has seen a surge in activities in recent weeks on the chapter level. Below is a recap of the recent events and presentations that kept AASP/MA members active and informed as spring turned into summer.

Collision Camaraderie On May 20, the AASP/MA Western Chapter held its first meeting of 2014 at the Slainte Restaurant in Holyoke. Drawing a full house of shops and other industry personnel from the area, the gathering emphasized the importance of education – both in supporting tomorrow’s technicians and getting current pros up to speed on aluminum repair.

First, the chapter was pleased to donate funds to Pathfinder Regional High School (Palmer) in support of two students, David Rouisse and Joseph Wyngowski, who recently won the Massachusetts SkillsUSA competitions for Collision Repair and Refinishing, respectively. This donation helps offset the cost of travel for Rouisse and Wyngowski to attend the SkillsUSA National Leadership & Skills Conference in Kansas City, MO. “When we heard that [instructor] Craig Sankey from Pathfinder Regional High School had SkillsUSA finalists and needed resources, the Western Chapter was more than happy to donate,” offers Western Chapter member Ed Nalewanski (Ed’s Auto Body, Easthampton). “It is so important to support the vocational schools. As everyone knows, these students are the future of our industry - but as everyone also knows, it’s very difficult to find good talent in this industry. Sadly, because the Labor Rate has been suppressed for so long, fewer and fewer students are enrolled in the auto body curriculum, and that is going to be a huge problem in the very near future.”

Photo, this page: The Western Chapter meeting in full force. (Photo

by Mike Boucher.) Facing page, above: Bob Collins of Wreck Check Assessments: “Without a measurement of quality, price means nothing.” Below: Ed Rachwal of Designer Office Systems, Inc. discusses the Mitchell RMC program at AASP/MA’s June 3 MidState Chapter meeting.

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In addition, Kevin Lombard of Lombard Equipment in Mendon (www.lombardequipmentinc.com) allowed shop owners the opportunity to participate in a live demonstration on dent pulling aluminum.

“Shop owners wanted to meet Kevin Lombard and see a demo, ” Nalewanski says. “Many commented that they were glad they attended and that Kevin and his assistant, Michelle, did an outstanding job.”

Nalewanski and fellow Western Chapter member Mike Boucher (Custom Auto Body, East Longmeadow) also gave a summary of the recent NORTHEAST® Automotive Services Show in Secaucus, NJ and encouraged all shop owners to attend next year. Bald Hill Dodge/Chrysler/Jeep/Kia, Balise Motors and Lombard Equipment also donated door prizes for the event.

AASP/MA Western Chapter Acting President Dan Lamontagne (White Lightning Auto Body, Williamsburg) credits the meeting’s success to the Chapter’s longstanding reputation for offering a sense of community to its members.

“All of us out here in the Western Chapter just all enjoy the camaraderie,” he says. “We’ll all in the same business, but we’re really not competitors. We try to help each other out as much as we can to stay afloat.”

“It’s a great group of people, and we truly care about one another,” adds Nalewanski. “It’s not unusual for one shop to call another and ask for a suggestion on how to do a particular repair or to get a reference on a specific vendor.”

In other news, the Western Chapter has announced October 3 as the date of its Annual Clambake at the Polish American Club in Feeding Hills. More information on the event will be featured in next month’s New England Automotive Report.

Making p&M work for you In response to requests from shops in the area for AASP/MA to host meetings, the association’s MidState Chapter moved the location of its June 3 meeting from the DoubleTree in Westborough to the Edward V. Coakley Four Winds Restaurant at the Greater Lawrence Technical School in Andover. This change resulted in a slew of new attendees, many of whom traveled down from New Hampshire to take part in the festivities. Introducing the speakers at the start of the meeting, AASP/MA Vice President Molly Brodeur (Al Brodeur’s Auto Body, Marlboro) noted that the meeting (organized with assistance from Bob Levy of Don Kennette, Inc.) was the direct result of feedback from the collision repair industry.

“It’s always been the philosophy of the association that you bring education to where your people want it,” she said.

The main topic of conversation throughout the evening was how collision repair shops can realize greater P&M profits through the use of industry accounting programs. Guest speaker Ed Rachwal of Designer Office Systems, Inc. provided an overview of how shops can use the Mitchell RMC (Refinish Materials Calculator) to identify additional charges and make more profit on the jobs that come through the door.

“Historically, the Northeast – and specifically New England – lag behind the national average,” he said. “One way to

collision repair industry, including the ADALB’s recent advisory ruling on digital imaging in the estimating process.

(See Castleman’s feature on page 16 for more information.) weeding out the hacks In the world of auto body repair, cheaper never means better. On June 17 at the Holiday Inn in Taunton, the AASP/MA South East Chapter hosted an eye-opening discussion on post-repair inspections and Diminished Value appraisals led by Bob Collins of Wreck Check Assessments (www.wreckCheck Boston.com). As the head of a company

providing consultation and assistance on collision-damaged vehicles before, during and after repairs, Collins has seen his fair share of poor work from both referral and independent shops. According to him, 46 percent of the vehicles his company has inspected have had safety defects, including structural damage that wasn’t repaired. Additionally, he says that 42 percent of the post-repair vehicles he has encountered displayed evidence of fraud in one form or another, including billing the customer for something the shop didn’t do.

continued on pg. 57

help get paid properly is to use [a Paint & Materials] calculator and make sure you’re getting paid what you should.”

According to the presentation, if a shop repairs an average of 40 cars per month, and the average differential in materials that a shop gets reimbursed for is $50, that business will increase its P&M reimbursement by $2,000 a month by utilizing a Mitchell product that costs $36 a month.

Rachwel’s seminar was followed by a special “Accounting 101” presentation

by AASP/MA member Tom Ricci (Body & Paint Center, Hudson), who offered an inside look into how shops can see greater profits by incorporating paint and materials cost analysis into their daily business and by following a formula of “sales minus costs equals gross profit dollars.”

“The benchmark in the industry across the country is $40 for gross profit on paint and materials,” he said. “If you use a refinishing materials calculator, I can tell you right now that seven out of 10 insurance companies – if not eight out of 10 – are going to accept [your charges].”

The meeting concluded with a legal presentation by Massachusetts attorney James Castleman, who provided an update on regulatory issues concerning the New England Automotive Report

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NATIONAL NEWS

Montanez offers airbag Testimony at ri Senate hearing addressed at the On June 5, hearing. noted industry “The technical writer and educator expertise that Larry Montanez ABARI brings to the (P&L Consultants) table every year at appeared before the these hearings, and Rhode Island Senthe professionalism ate Committee on that you are reprethe Judiciary as an senting your indusexpert witness on try with, is impressbehalf of the Auto Body Association of Larry Montanez (far right) offered expert testimony to a RI Senate Committee on behalf of the ive,” he said. “You should be very Rhode Island Auto Body Association of Rhode Island (ABARI). proud of that.”

(ABARI) to offer Complete video professional comBut there’s no standard on taking an of the hearing (including Montanez’s ments and opinions on current bills re- airbag in or out.” extensive testimony) is available for lated to the auto body industry.

Senate Deputy Minority Leader free streaming at http://ricaptv.discovOne bill in particular, Senate Bill Dawson Hodgson (R-District 35) ervideo.com/embedviews/vod?c=all& 2833, aims to prohibit insurance compraised ABARI for offering Monw=640&h=480&s=1#. panies from requiring the use of used tanez’s technical knowledge and proor remanufactured airbags and/or viding greater insight into the issues suspension parts when vehicle repairs are made by an auto body shop. Andreas Heiss, a government affair manager for LKQ Corporation, appeared before the Committee in opposition to the bill, stating that shops that perform airbag removal are subject to strong guidelines to ensure consumer safety.

“There are very strict federal safety standards for removing these airbags,” he said. “The shops that do that have to be certified in a certain way, and they’re trained to remove these airbags in a certain way.”

Calling Montanez “the only expert I’ve heard tonight come before us,” Senator Stephen R. Archambault (DDistrict 22) later asked the repairer if such standards actually existed.

“There’s no federal standard on removing an airbag out of a vehicle; I’d like to see one if one exists,” replied Montanez. “There is a federal standard on what EDRs [event data recorders] actually have to record – which is black box-like technology...

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MARK MY WORDS

Credit Cards and your Bottom line

by Mark Giammalvo

I

f you’ve watched your favorite nightly news channel or read any of the major newspapers lately, you may have seen an article about a recent lawsuit against the big banks and credit card companies. As a result of this lawsuit, businesses that accept credit cards as a form of payment may finally see some relief, due to a reduction in future fees charged as well as the possibility of future “fee collection” from consumers.

Not to be confused with the debit card regulations brought about by the Durbin Act of 2011, this latest news event involving MasterCard, Visa and other banks should bring some new relief to merchants that are taking major credit cards as forms of payment.

Several law firms representing numerous large retail stores like Kroger, Walgreens and others have won a settlement (pending judge approval) claiming that MasterCard, Visa and some major banks were violating antitrust laws by agreeing to set specific merchant credit card swipe fees and other charges. In the settlement, MasterCard and Visa will soon lower rates to provide immediate relief to merchants that accept credit cards. They will also finally allow merchants to collect fees from consumers that they are charged when credit cards are used. (Prior to this settlement, credit card merchants could not bill customers for the fees they are charged by the bank and credit card company for using the credit card. However, merchants could offer a discount for customers using other forms of payment like cash and checks).

If you recall the Durbin Act (sometimes referred to as the “Durbin Final Rules”), the Feds made banks “cap” the maximum fees charged when a debit card is used. Prior to Durbin, credit card companies were routinely charging the same usage fees for a debit card and a regular (non-debit) credit card.

However, debit cards draw the consumers’ own funds and they are much more secure from a fraud standpoint, since a Personal Identification Number (PIN) is needed during the transaction. The Durbin Act was touted as a remedy to merchants for some of the high fees being charged to them by the banks.

Here at the shop, we have many customers who pay for their service with a credit or debit card. I don’t know about you, but every time I look at our bank’s monthly bank settlement statement, my head spins going through the various fees we are charged just for allowing customers the convenience of using this type of payment. There are “swipe” fees just for reading the card as well as a “percentage” fee of the invoice amount for the card itself. That is always confusing; some MasterCard and Visa cards are keyed to take 1.8 percent out of our invoice total; others (the corporate or “flyer mile” cards) take close to 3 percent of the invoice total. Then there are batch fees and settlement fees. Quite frankly, it’s very confusing and costly, but it’s always been a necessary expense we’ve had to endure; some customers just can’t afford to pay cash in this 54 July 2014

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tight economy.

A few years back, when we left our old credit card merchant provider and switched to our current bank, the new bank supplied us with a new credit/debit card reader terminal and promised us lower fees than we had been paying in the past. Well, every month for the past year, we have been inundated with letters from our bank, saying how Visa just went up on this rate, MasterCard just went up on another rate, our swipe fee will have to increase and so on. You can imagine our excitement in hearing about this latest lawsuit’s promises to change the credit card industry and reduce costs for us all as merchants.

Could recent legal activity in the credit card industry bring relief to merchants taking major credit cards as payment?

One of the more interesting items I am led to believe in this lawsuit is that we merchants will finally be able to collect the fees we pay for each transaction directly from the customer. Exactly how this will be accomplished seems to still remain a mystery.

The confusing part is that the rates are all over the place, depending on what type of credit card a customer uses. We also don’t know what percentage fee is actually charged to us until 30 days later, when we get our statement. That being said, if we can now charge the customer for the fee we have to pay for them using the credit card, how do we know exactly what to charge them at the moment of sale? It would be convenient if the credit card machine could calculate the fees and allow us the option of adding them to the customer’s payment at that moment. I don’t think it’s going to work that way.

In an attempt to put this speculation to rest, I called our bank’s merchant services division to inquire as to when and how we can collect our fees back from the customer. They did not know what to say and stated that they were not aware of the recent lawsuit (the same one that had made all the major national news channels and newspapers a few weeks back).

They even transferred me to a regional manager, who was also

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FEATURE continued from pg. 47

not aware of this recently announced settlement. She did state, however, that when they are officially notified, they will send notification via mail, same as they did when the Durbin Amendment was passed. This bank representative also politely reminded me that it is still a violation of our credit card acceptance agreement to charge customers for the fees that are charged to us for the service.

She noted to me that she had recently been at a Virginia courthouse, where she had observed that the court was charging a fee to offset their fee to people paying for certain reports/documentation by credit card. I added how I had recently noticed at City Hall how our city charges a fee for those residents paying real-estate taxes with a credit or debit card. It’s possible that certain state or municipal agencies are allowed to collect a fee to offset the credit card processing costs. She could not say for sure.

It remains to be seen exactly how and when merchants will be able to recoup these costly fees for the convenience of accepting credit cards as a form of payment. There have been some articles online lately stating that some merchants may continue to absorb the cost or pass it on in other ways, rather than cause a possible point of contention during the checkout process. I’m sure as business owners, we will all be keeping an eye out for future updates in the news about this lawsuit Mark Giammalvo and the issue of merchant specializes in driveability fee collection and lower diagnostics at his family business, fees.

Sam Giammalvo's Auto Sales & Service, Inc. in New Bedford, MA. He can be reached at

MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

samgauto@samscars.com.

In Collins’ mind, the increase in poor repairs is directly related to the escalating economic pressure forced by the insurance industry on collision shops to cut or limit repair costs.

“The consumers have been trained by the insurance companies to buy insurance based on price alone,” he says. “Nobody ever told them that with cheap price comes low quality.”

To illustrate his point, Collins presented a series of photos demonstrating poor repair work.

Common issues included improper welds, broken headlamps, paint overspray, no seam sealing and a lack of rust-proofing. Collins believes that these conditions are the result of a lack of proper education for technicians and the absence of suitable payment for professional body shop repair.

“If the shops aren’t making any money, they’re not training their guys,” he says.

On a positive note, Collins mentioned that plenty of opportunities exist for professional shops interested in doing re-repair work, as disassembly, measuring, wheel alignment, storage and other items are all chargeable if a shop is willing to take on fixing someone else’s poor workmanship.

Collins also discussed what he called the “Seven Levels of Repair.” The top level is a repair that is considered true pre-loss condition, while the second level would be a high-quality, visibly undetectable repair. The third level (which Collins

continued on pg. 62

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2014 MEMBERSHIP APPLICATION MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

as a member of the alliance of automotive Service providers of Massachusetts (aaSp/Ma), i will abide by the association’s bylaws and code of ethics. i understand that membership in aaSp of Massachusetts is non-transferable, and i must remain current with my dues in order to be a member in good standing. i understand that if i discontinue my membership that i must immediately cease using any association promotions, logos or materials. additionally, i understand that as part of my aaSp of Massachusetts membership, i will receive New England Automotive Report, the official publication of aaSp of Massachusetts, faxes, emails and other mailings.

*** PLEASE TYPE OR PRINT LEGIBLY *** BUSINESS INFORMATION: Mr.

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Total Due .................................................................................$395.00 SUPPLIER/ASSOCIATE MEMBER (check one) Auto Paint/Crash Parts/Auto Parts/Wholesaler Equipment/Tool Supplier Manufacturer/Sales Agent Services (Computers, Software, Vehicle Rental, Other)

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________________________________________________________ Just like good tools and equipment, membership in AASP of Massachusetts is a valuable investment. AASP of Massachusetts works for you through such outstanding programs as: (1) management and technical training; (2) discount uniform rental; and (3) a wide variety of other business services.

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COMPLETE THE MEMBERSHIP APPLICATION AND RETURN IT WITH PAYMENT TO AASP OF MASSACHUSETTS.

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FEATURE continued from pg. 57 said was the industry average) is a good repair with minor defects. A levelfour repair would be a poor job with moderate defects and deficiencies, while the fifth level would have major defects and deficiencies. Level Six would be a very poor repair with defects so severe that the vehicle is rendered unsafe to drive, while vehicles at the seventh level are so poorly repaired that it would be cost-prohibitive to

attempt a re-do.

Above all, Collins stressed that there is often a difference between doing a job right and doing a job at a low cost.

“Without a measurement of quality, price means nothing,” he said.

For information on upcoming AASP/MA events, please visit www.aaspma.org.

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AUT M TIVE AD INDEX American Honda ..............................................30 Audi Group ......................................................50 Axalta Coating Systems ....................................4 Bald Hill Chrysler Jeep Dodge Ram ..............27 Balise Wholesale Parts Express ......................44 Baystate Chrysler/Jeep/Dodge......................42 Bernardi Group............................................32-33

MASSACHUSETTS

Best Chevrolet ................................................IFC

BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY

BMW Group ................................................48-49 BMW/Mini of Warwick ..................................40 CCC One ............................................................59 Clay Subaru ......................................................10 Colonial Auto Group........................................52 Empire Auto Parts ............................................11 Enterprise ..........................................................21 First Chrysler-Dodge-Jeep-Ram ....................21 First Ford............................................................21 First Hyundai ....................................................21 Ford Group ........................................................56 Future Cure..........................................................8 Goyette’s Inc. Auto Parts ................................11 Honda Group ....................................................58 Hyundai Group ................................................39 Imperial Chrysler-Dodge-Jeep........................12 Imperial Ford ....................................................56 Infiniti of Norwood ..........................................24 IRA Group ....................................................14-15 Jaffarian Toyota/Volvo ....................................53 Kelly Automotive Group ..............................IBC Linder’s, Inc. ....................................................47 Long Automotive Group ............................OBC Mazda Group ....................................................45 McLaughlin Chevrolet ....................................57 Mopar Group ....................................................12 Nissan Group ....................................................25 Nissan World of Dartmouth............................41 PPG ......................................................................3 R.F. D’Agostino Insurance Agency ................51 Robertsons GMC Truck....................................41 Sarat Ford-Lincoln ............................................27 Sentry Group ......................................................6 Subaru Group ..............................................34-35 Tasca Group ......................................................31 Toyota Group ....................................................55 Toyota of Nashua..............................................62 Village Auto Group ..........................................60 VW Group..........................................................19 Wellesley Toyota/Scion ..................................42

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